Regional leader to rescue Indian government in retail reform vote

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Last Updated: Thu, Dec 06, 2012 10:50 hrs

NEW DELHI, Dec 6 (Reuters) - The leader of a powerful
regional party said on Thursday she would back the Indian
government in a parliamentary vote on its plan to allow in
foreign supermarkets, virtually ensuring that an opposition
motion against the reform will be defeated.

"Our party will vote in favour of the government tomorrow,"
the Bahujan Samaj Party (BSP) leader, Mayawati, said during a
debate on a policy that would bring global chains such as
Wal-Mart Stores Inc to India's $450 billion retail
sector.

Prime Minister Manmohan Singh's minority coalition
government won a non-binding vote on the same issue in the lower
house of parliament on Wednesday thanks to abstentions from the
BSP and another regional group, the Samajwadi Party.

It had looked set to lose in an upper house vote scheduled
for Friday because it has fewer parliamentary seats there.

However, the capricious Mayawati's unexpected pledge of
support from her party's 15 upper house lawmakers means the
government may be able to count on as many as 117 votes, which -
if the Samajwadi Party abstained - would be just enough to win
in the 245-seat chamber.

Mayawati - whose power base is in the country's
most-populous state, Uttar Pradesh - said her decision was
partly based on the government's willingness to let individual
states decide whether they allowed in foreign retailers.

A second win on the retail policy will be a much-needed
boost for Singh as he tries to drive a second wave of reforms
through a fractious parliament. The debate over retail reform
has proved a costly distraction for the minority government,
eating up two weeks of parliament's month-long winter session.

The government's win on FDI would clear the way for voting
on bills aimed at attracting foreign investment to the ailing
pension and insurance industries, two measures seen by financial
markets as important steps in further liberalising an economy in
the midst of a slowdown.

Indian shares recovered early losses after Mayawati's
announcement, rising for the third day. Gains were led by a
rebound in rate sensitive stocks on hopes of momentum on the
pension and insurance bills.